Air India sees tailwind in nonstop flights to US

Looking at 26% growth in revenues from US operations this fiscal

NEW YORK: Air India is banking on the US market to return to profitability.
The India-US sector has been the largest revenue generator for the national carrier, contributing around 26% of its revenues for 2006-07, way ahead of the Gulf. That is reason enough to renew focus on the US market.

The airline recently started a nonstop service between Delhi and New York, on the lines of its Mumbai-New York flights.

But, already, it is looking at a 26% growth in revenues from its US operations this fiscal, to Rs3,300 crore (Rs2,615.76 crore).

AI officials declined to give an estimate of revenue growth during 2008-09, the first full year of nonstop operations to the US. They affirmed, though, that the nonstop flights would not be replacing flights via London.

Another nonstop service from Bangalore to San Francisco would be launched later this year.

Flights to Washington and Texas with intermediate stops at a European point later in the year are also on the cards.

With the launch of the Delhi-New York nonstop service, the frequency of AI’s flights to the US has increased to 38 per week, 21 to New York alone.

The carrier now offers 12,536 seats per week to the US - 6,293 to NY, 2,394 to Newark, 2,961 to Chicago and 888 to Los Angeles.

In order to improve services and add capacity, AI has already placed large aircraft orders, which would be used for nonstop services to the US, replacing its old fleet and using own aircraft in place of leased ones.

According to current orders, five Boeing 777-200 LRs (long rangers) would be in place this year and another two are to be delivered by 2009; six Boeing 777-300 ERs will come in this year and three more will be in use by 2011.

For the Gulf services, which AI operates through its low-cost subsidiary, AI Express, 18 777-300 have been ordered of which 11 are in. The rest have been taken on lease. By 2009, seven more would have been delivered, taking the total fleet size to 25.

But, will these measures help the beleaguered carrier return to profitability? While improving services to the US and replacing old aircraft is a step towards better financial health, AI needs many more new planes for expanding capacity in the near future and orders for this second round of aircraft buying are yet to be placed.

b_sindhu@dnaindia.net